As we creep into the end of another year, it prompts us to consider our charitable gifting opportunities in respect to our year-end tax planning. There are many ways in which you can structure a gift to provide benefit to you personally while supporting the causes that mean the most to you. Congress has recently made it more attractive for IRA owners over 70 to do just that.
On October 3, 2008, as part of the economic recovery plan, the House joined with the Senate to approve the much awaited IRA charitable rollover plan. This allows IRA owners to make a direct gift to their parish, parish school, diocese, or other qualified diocesan institution through their required minimum distribution from an IRA. This also applies to legally binding pledges you may have made to the Church.
|
The chart below indicates the approximate annuity payment based on a single life. ACGA approved rates. |
|
 |
|
In other words, you can gift up to $100,000 directly from your IRA to a qualifying charity and avoid the normal taxation on the income distribution. Those distributions will not count on your personal tax return, and could actually reduce your tax liability. This opportunity is for those who do not itemize and take the standard deduction. The important thing to remember is to contact your IRA custodian before the distribution is made to arrange for proper transfer of the funds directly to charity.
Gifts of appreciated securities or real estate are also a wise option for year-end gifting. Often times, people are not aware of the double bonus they will receive by using appreciated property to fund a charitable gift. You can avoid capital gains accrued over time and still secure the charitable gift value.
If you have low yield investments or securities that are not providing income and would like to consider utilizing these to fund an income-generating vehicle, the opportunity exists. Consider a charitable gift annuity (CGA) to provide a competitive rate of return and leave a planned gift to your parish or the diocese. By establishing a CGA, your parish or the diocese can say “thank you” now for making a planned gift they will benefit from later. You get the charitable deduction immediately plus you are assured of a fixed income for the rest of your life. Simply contact the diocese on how to turn these securities into attractive gift options.
Take time to review your tax strategy for this year. You might be surprised at how much of your hard-earned income is going to taxes. With some wise planning, you can take advantage of year-end giving to help offset taxes and, more importantly, make a significant gift to your parish or diocesan ministry that will provide benefit for years to come. As we consider the bounty of the fall harvest, we are reminded of the bountiful blessings God provides to each of us every day. What a wonderful harvest it is!
If you have questions on these or other year-end gift options or would like more information about planned giving, please visit madisondiocesegiving.org or contact Daun Maier in the Office of Stewardship and Development at 608-821-3046.
This information is not to be considered legal, tax, or financial advice. Please consult your legal, tax, or financial advisor to determine the best plan for you.
Daun Maier is associate director of the Diocese of Madison Office of Stewardship and Development.